Basil Read loss after ‘terrible year’

MID-tier construction and engineering group Basil Read announced shockingly bad results for the year ended December, reporting a net loss of R821m.

It saw loss-making contracts across all its construction operations, which coupled with a “struggling” engineering division, overshadowed “stable performances” by the mining and building developments divisions. “The board and management of Basil Read recognised the company was heading for these dreadful results, CEO Neville Nicolau said on Friday. “We had a terrible year last year.”

This was mostly due to “tricky trading conditions … especially in the construction sector, coupled with a difficult contractual environment and a poor operational performance”.

The group said it was a challenging year for contract mining service firms in sub-Saharan Africa. Pressure on commodity prices and prolonged labour unrest had significantly reduced the number of new opportunities, and many projects were being scaled back, delayed or halted. One-off impairments — including for R222m in goodwill — and several executive departures over the past year had also substantially destabilised the business.

But Mr Nicolau said the new group leadership had restructured the firm into core and noncore assets, and had also taken action by the end of last year to “rightsize the organisation and streamline operations”.

allixm@bdfm.co.za

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